2012

NATURE AND SCOPE

OF MANAGEMENT
Interesting Concepts and Pioneers of
Management
Management topics are given in a purely simplified form to make the job simple
for management students. You will find all the five enclosed essays crisp and
consolidated. This pdf is designed to invoke interest and expand your knowledge
on management and its scope.

Shyama Shankar
Managementguru.net
10/23/2012

1.An Introduction to Management

I plan to cover the following topics under the heading management. We need to know
about

Science
Theory
Practice
Evolution of management
Patterns of management analysis

Some good definitions on Management:

According to Harold Koontz,

"Management is the art of getting things done through and with people in formally
organised groups."- in his book "The Management Theory Jungle".

According to Henri Fayol,

"To manage is to forecast and to plan, to organise, to command, to co-ordinate and to

control."- in his book "Industrial and General Administration".

According to Peter Drucker,

"Management is a multi-purpose organ that manages business and manages managers

and manages workers and work."- in his book "The Principles of Management".

According to Mary Parker Follet,

"Management is the art of getting things done through people."

According to William F.Glueck,

Management is the effective utilization of human and material resources to achieve the
enterprise objective.

Concepts of Management:

Management as an Activity

Leader is the Manager

Team consist of the Subordinates
Synergy - Leads to enhanced performance
The activities of management are:
1. Interpersonal activities
2. Decisional activities
3. Informative activities

Management as a Process

Management is a continuous process involving interaction of people and integration of

human, physical and financial resources.

Management as an Economic Resource

Management is an important factor of production like

1. Land
2. Labor and
3. Capital

Management as a Resource

Management as a Team

The team comprises of

1. Top level management- CEO ,CHAIRMAN,PRESIDENT and the like
2. Middle level management-Department Heads
3. Low level management-Work force or the Employees

Management as an Academic Discipline

Getting a management degree has become the order of the day and many reputed
educational institutions are coming out with a new discipline in management course
every day that rewards an exciting and challenging career for the graduates.
Management professionals are the need of the hour for corporate companies to
manage the dynamic environment that poses very many challeneges.

Management as a Group

1. Chief executive (managing director),

2. Departmental heads
3. Supervisors make up the management group.

MD
Department
Heads
Supervisors

2.Nature and Characteristics of Management

1. Management is goal-oriented: The ultimate purpose of management is to achieve
certain goals over a period of time. The goals must be realistic and achievable that
ensure efficient utilization of the resources and satisfy the enterprise objectives.
2. Management is universal: Where ever there is a business activity or nonbusiness
activity, management comes into the fore. Be it a small family function or a multi crore
business activity, you need people and other resources to make it a success.
3. Management is an Integrative Force: Team work creates synergy and
accomplishment of the firms objectives by the unified and co-ordinated efforts of all the
individuals working for that firm.
Note: 1+1=2, we all know that . Have you heard of 1+1>2 , Yes, synergy is the
combined effort of all the people working as a team that leads to enhanced performance
levels facilitataing the completion of objectives in a short span of time.
Dhirubhai Ambani was very popular for completing tasks in lightning speed. This was
possible only because he had able administrators who shared the same kind of
wavelength.
4. Management is a Social Process: You can become an excellent manager without
becoming a good leader, but you cannot be an excellent leader without becoming a
good manager.
This explains it all. Management is a social process since it involves people and their
inter personal relationship. A good manager succeeds in motivating , guiding and
extracting work from people working under him.
5. Management is multidisciplinary: Management takes inspiration from disciplines like
engineering, sociology, psychology, economics, anthropology etc.
6. Management is a continuous Process: Management is a dynamic and an on-going
process. A business has to die on its own.
7. Management is Intangible: The success of management can only be measured by
the results being shown by the company like its market share and net profits. But the
image of the company gtes boosted if it has iconic performers in the form of managers.
8. Management is an Art as well as Science: Theory combined with practical application
makes management a special body or entity backed up by ethical considerations and
influenced by social obligations.

3. SCOPE OF MANAGEMENT
Management determines the very survival of the organization
Management concepts are applied in both business and non-business organizations
In countries like USA the demand for management consultants is widespread and they
have more clients from,
1)

Government

2)

Hospitals

3)

Universities

4)

Schools

5)

Professional associations

6)

Community agencies etc.

In India it is sad to see that only graduates coming out of reputed business schools
being placed in the cream of positions by the corporates and others who pass out from
the so called second grade institutes struggling to ground themselves. Many institutes
offer management courses in the undergraduate and graduate levels for name sake that
fail to implant the core purpose and perspective of the concepts of management in the
minds of individuals. Also lack of expert faculty who have wide exposure and industry
experience make the course dull and lifeless.
Coming back,
7)
Management is said to be Universal and applied to all the organizations of the
society, whether it is large or small, profit making or non-profit making, and a
manufacturing or service enterprise
8)
Managing is the key social function and management is the effective,
integrative,constitutive, determining, and differential organ of the society

9)
Management is the organ of leadership, direction and decision in a business
enterprise and responsible for producing the results
10) Management has evolved as the most lucrative academic discipline by itself
offering huge scope for the graduates to perform and excel as teachers. Management
faculty are in great demand all over the world and are as well compensated for their
services.
11) New disciplines of management like Public Health, Health care, Information
Technology,Labor management are gaining importance
12) Effective management is aimed at improved productivity ( efficient people produce
effective results-so RIGHT PEOPLE FOR THE RIGHT JOB becomes essential)

The society has various facets like government, suppliers, local community,
competitors, unions, stock-holders, customers etc. The manager is the spokesperson
in-charge of negotiating and spending much of his time to predict and influence the
future environment and take pro-active measures. This is the managerial function
relating to the environment.

4.MANAGEMENT FUNCTIONS
The objective of this topic is to make students understand the functions of management
and the role of managers in an organization.
The five basic management functions are listed below:

PLANNING

ORGANISING

STAFFING

LEADING

CONTROLLING

PLANNING:
The managerial activities aid in selecting the objectives, examine and forecast changes,
develop policies, procedures and choose future course of action from among
alternatives. Planning proceeds from Where we are to Where we want to go.

Planning activities are

1.

Analysing the current situation (also called the SWOT Analysis)

2.

Anticipating or predicting the future based on the analysis

3.

Determination of organizational objectives to be achieved

4.

Deciding on the action plan

5.

Evolving proper strategies

6.
Pooling the resources (physical, financial and monetary) to accomplish
enterprise objective

ORGANISING:
It is a process which integrates people and tasks; In order to achieve their tasks people
are given sufficient authority, tools and information.

Organising activities include

1.

Specification of job responsibilities

2.

Grouping of jobs into respective work units

3.

Allocation of resources

STAFFING:
Human resource management is one of the key areas that decides the success of a
firms activity. Staffing involves the selection of Right person for the right job.
The activities are
1.

Recruitment

2.

Selection

3.

Training and Development

4.

Compensation

5.

Promotion

6.

Evaluation and

7.

Rewarding people to achieve enterprise goals.

LEADING:
Leadership is the set of interpersonal behaviors that influence people to contribute to
the organization and group goals.
The activities under this category are
1.

Providing proper direction

2.

Guidance and Motivation

3.

Clarity in communication to the work force

CONTROLLING:
This is a process that is necessary to keep track of the performace of individuals by
setting some standards for direction.
The activities include
1.
Establishing performance standards enabling the work force to achieve the goals
(both short term and long term)
2.
Enhancing the employee performance through performance appraisal or rating of
work
3.
Comparison of performance against the standards to identify deviation or work
problems and take corrective measures
4.
Bench marking is one of the management techniques that facilitates an
organization to uplift its performance levels to the best of industry standards and also
catch hold of the strengths of the competitors and rectify the weaknesses prevailing in
ones own firm.
CO-ORDINATION:
It is regarded as a key function of a manager to bring in harmony among individuals and
an effort towards accomplishment of goals.
1.

Marginal decision making and

2.
Sub Optimisation are some of the new approaches developed in the field of
decision making.
MANAGERIAL SKILLS:
Skill is the resultant effect of knowledge, experience and expertise. It is the ability of an
individual to perform a task which is obvious from the results he/ she shows.
There are 3 kinds of skills that a manager should possess in order to excel.
1.
The Conceptual Skill: Assessing a situation and acting accordingly depicts the
managers perceiving ability of the abstract elements in force. A manager has to
improve this kind of skill as he moves up the ladder in the management level or let us
say that he can move up the ladder only if he possesses this kind of skill.

Management Consultants

Managing Director of a firm

President of a company

Economists

Startegists are conceptual analytic experts

2.
The Technical Skill: This skill is purely based on ones knowledge and on the
job experience. This is needed at a lower level of management

Computer Operators

Engineers

Accountants

Machine Operators possess this kind of skill

3.
The Human Relations Skill: This is needed at all levels of management as it is
all pervasive and represents the ability of a manager to interact efficiently with
individuals.

Counselling

Performance Appraisal

Feedback

Human Resource management

Conflict management

Negotiations need this skill set.

5.EVOLUTION OF MANAGEMENT THEORY

Thiruvalluvar, the great tamil poet has written 1330 couplets on attitude, work procedure
and lifestyle
It all began with ADAM SMITH (1776), the Scottish economist when he lashed out
against the abuses of monopoly and mercantilism. He highlighted that productivity was
a result of specialization, division of work and exchange. We witness the evidence of
managerial practices right from the Sumerian age as early as 5000 B.C., from their
written records to administer the governmental and commercial activities.
Koutilysa ARTHASASTHRA and Thiruvalluvars THIRUKKURAL
management principles in a coherent way that suits any time period.

have spelt out

MILESTONES IN DEVELOPMENT OF MANAGEMENT THOUGHT:

5000 B.C
4000 B.C

SUMERIANS
EGYPTIANS

500 B.C
1800

GREEKS
ELI WHITNEY

1822

CHARLES BABBAGE

1911
1916

F.W.TAYLOR
HENRI FAYOL

RECORD KEEPING
PLANNING,ORGANISING
AND CONTROLLING
SPECIALISATION
MASS PRODUCTION MADE
POSSIBLE
PRODUCED DIFFERENCE
MACHINE,A FORERUNNER
OF TODAYS COMPUTER
SCIENTIFIC MANAGEMENT
MANAGEMENT

1943
1954

ABRAHAM MASLOW
PETER DRUCKER

1961

RENSIS LIKERT

FUNCTIONS
MOTIVATION MODEL
POPULARISED MBOMANAGEMENT BY
OBJECTIVES
CONTINGENCY
LEADERSHIP

PRE-SCIENTIFIC MANAGEMENT SCHOOL

Management is as old as civilization and it is a separate entity by itself. The full boom of
management was witnessed with the advent of INDUSTRIAL REVOLUTION in Europe
in the late 18th century. There was mass exodus of people to urban cities in search of
jobs due to mechanisation and there arose a necessity to manage people. Initially they
were treated as slaves by the owners but later the link factor called Managers came
into the picture to negotiate and solve issues between the union and management.
Important contributors to the management theories
Robet Owen:
He introduced a system of open rating for workers work on a daily basis. He insisted
that improving the lives of the working individuals through labor welfare measures was
the only way to increase productivity.
Charles Babbage:
He was a visionary who could foresee scientific management. His difference engine or
the modern day computer has made peoples lives easy and has replaced manual
operations with machines.
Captain Henry Metcalfe:

He formed the Bureau of Personal Administration in New York

Introduced time cards and material cards

Fredrick Winslow Taylor:

Founder of scientific management and is called the Father of scientific
management.He emphasized on the need for management planning and
standardization of tools and materials, the former to gauge the capability of men and
machine and the latter to save time and increase productivity.He was one of the
founders of Time and Motion study.

His theory was based on the following assumptions:

Production planning and control is the main function of an organization

Insisted on functional foremanship

Time study as the basis for arriving standard time

Standardisation of all tools and parts

The use of slide-rules and similar time saving implements

Inroduced time-cards for workmen

The differential rate system of wages

Henry Gantt:
He proposed the Gantt Chart, a visual method to compare production output with time it
took to complete a task. This is considered to be a forerunner of todays PERTPROGRAMME EVALUATION and REVIEW TECHNIQUE).
He also developed

Work quota systems

Bonus systems for workers or managers

GANTT CHART
Objectives of Scientific Management

To ensure continuous employment opportunities for the work force

To gauge market tendencies

To render workers a high standard of living; this motivates them to contribute

more

To increase the income of the workers

To assure a socially agreeable condition of working environment

Proper selection, training, assignment, transfer and promotion of workers

To develop self-confidence and self-respect among workers through opportunity

and participation

To promote justice through elimination of discrimination in wage-rates

To eliminate causes of friction and to promote understanding, tolerance and the

spirit of team-work-Espirit de corps.

MANAGEMENT PROCESS SCHOOL

Henri Fayol (1841-1925)

Henri Fayol has propagated 14 principles on management which are very popular.

1. Division of labor: He insists on a high degree of specialization in order to improve

efficiency. Both managerial and technical works are amenable to specialization which
leads to better work with the same efforts.

2. Authority and Responsibility: Authority can be classified into Official and Personal
authority, the former needed by a manager to extract work from the subordinates and
the latter emanating from the managers own intelligence, integrity, experience,
personality, knowledge and skills. Responsibility comes along with authority; one who
has the authority should also be able to take up responsibility.

3. Discipline: Obedience, diligence, correct attitude and outward mark of respect is the
essence of discipline which exists as an unwritten agreement between the management
and its employees

4. Unity of Command: A subordinate must receive orders and instructions from one
superior only

5. Unity of Direction: Activities of similar nature should be grouped under one superior
so that the efforts could be streamlined towards the common goal.

6. Sub-ordination of individuals interest to the Common Goal: The personal

interests of an individual (like money, recognition etc.) should not be placed before the
goal of the organization, which is maximizing production.

7. Remuneration: Fair and equitable remuneration should be provided to employees to

ensure better production and satisfaction.

8. Centralization: The concentration and dispersal of authority must be balanced in an

organization

9. Scalar Chain: The authority chain from top to bottom should be followed at all times
for the purpose of effective communication

10.Order: Human and material resources should be co-ordinated so as to be in the

required place at the required time

11.Equity: Fairplay,justice and friendliness is what the employees expect of the

organization

12.Stability of Tenure of Personnel: Too much of Job turn over and rotation affect the
work in progress and destruct the stability of the work units
13.Initiative: Subordinates must be encouraged to participate in the decision making
process to show their initiative
14.Espirit De Corps: In union there is strength and so is team work.Team spirit and a
sense of unity and togetherness should be fostered and administered in an
organization.
James D.Mooney and Allen C.Reilay
The Line and the Staff Principle:

According to this principle, the line authorities get things done while it recognizes the
role of staff authority who are experts in providing guidance and advice. The emphasis
is on,

Hierarchial structure

Clear decision

Delegation of Authority and Responsibility

Specialization of Tasks

Co-ordination of activities and

Utilization of staff experts

THE HUMAN RELATIONS SCHOOL

The human behaviorists believed in COLLABORATIVE management which is possible
when managers are capable of harmonizing the efforts of individuals at all levels of the
organization. This concept draws heavily from psychology and social psychology.

Motivation

Leadership

Communication

Training

Participative management

Group dynamics are assigned importance

The important contributors are Elton Mayo, Roethlisberger, Mary Parker Follet, Chester
I Bernard, Abraham Maslow and Douglas McGregar.
THE EMPIRICAL SCHOOL
Case study analogy is the best way to understand management is the idea behind this
school of thought. The mistakes of managers are converted into rich experiences over a
period of time and the findings are transferred to the practitioners in the management
profession. The contributors are,

American Management Association

Harvard Business School

Ernest Dale.

However, critics feel that this may not be suitable when it comes to training imparted for
making decisions.
DECISION THEORY SCHOOL
All the managerial functions rest on only one thing, that is Decision-making, is the crux
of the contribution of this school and the pioneers are

Herbert A. Simon

James G.March

W.Forrester

Richard M.Cyert

This school relies on decision models created using various mathematical tools and
techniques. For example, the concept of sub-optimization and marginal decisionmaking.
THE SYSTEMS SCHOOL
The organization is an open system that operates within and also interacts with the
environment.
This includes

Inputs from external environment

The transformation process

The system of communication